Farmer's Insurance

Your customer doesn't mind paying a higher premium as long as he gets a life insurance product that would allow for a faster growth of the cash value. What kind of policy would you recommend?

Because the cash value in an endowment has to build up faster since the funds are intended to be used while the insured is alive, the premium for an endowment is considerably more expensive than an ordinary straight life policy.

level term insurance policy

Level term insurance is the most common type of temporary protection purchased.

In Modified Life policies, what happens to the premium?

Modified Life policies charge lower premiums (similar to term rates) during the first few policy years, usually the first 3 to 5 years, and then higher level premiums for the remainder of the insured's life. The higher subsequent premiums are typically higher than straight life premiums would be for the same age and amount of coverage.

Adjustable life policy

The death benefit can be increased by providing evidence of insurability

Annually renewable term policies

Annually renewable term policies provide a level death benefit for a premium that increases each year with the age of the insured.

What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy?

Modified life policies were developed to attract young professionals who have a large financial investment in their education and training, but starting their professional careers, they have limited resources to buy insurance. Modified life is a permanent policy, but in the early years, the premiums are similar to that of a term policy; in later years, the premiums are increased to build cash values and cause the policy to endow.

decreasing term policy

Premiums remain level with a decreasing term policy. Only the face amount decreases.